Discovery CEO says overseas growth soars on more rights, content

Timea Bacsinszky of Switzerland at the French Open, where Discovery's Eurosport is broadcasting the event. Photo / AP

Discovery Communications, the US-based pay-TV network that owns shows like Gold Rush and Deadliest Catch, is aiming for 65 per cent of revenue from its international business in three years.

Discovery will achieve its goal partly by buying more programming and sports rights, Chief Executive Officer David Zaslav said on Thursday in an interview at the French Open tennis tournament in Paris, where the company's Eurosport is broadcasting the event. Discovery spent more than $2 billion on content last year and gets about 55 per cent of revenue overseas.

"We're experiencing double-digit growth in Europe and we've been further helped by the decline of the euro, which for us has meant the cost of product in Europe is coming down," Zaslav said.

The Silver Spring, Maryland-based TV company, which also owns the TLC and Animal Planet channels, said slowing growth in the US is offset by a strong business overseas, led by countries such as the UK and Brazil.

Discovery is expanding its Dplay online video streaming service from Norway to Denmark, Italy and Sweden. It will compete with Netflix and Sky's Now TV on-demand service as more people watch video on devices such as tablets and smartphones.

"We own all of our content, which is a huge advantage," Zaslav said. "We own all of it and in 52 languages - that's the differentiator. And now we're transitioning into a direct- to-consumer company. Europe for us is the next emerging market."

Discovery, which counts cable-TV billionaire John Malone as a chief investor, this year acquired majority control of France-based Eurosport and is bidding for more sports rights as such content helps lure advertising and subscribers.

App users tap here to view Discovery's Time Slice of a Great White Shark

"Sports is critical for us to elevate Eurosport and we're seeing a big pickup of viewers," Zaslav said, stressing that Eurosport is adding sports rights in countries sometimes overlooked by the big players, who are more consumed with expensive soccer rights. Eurosport counts the UK, France and Germany among its biggest markets.

In the UK, Sky and BT Group in February agreed to pay a record 5.14 billion pounds for the UK rights to broadcast live English Premier League soccer, an increase of about 70 per cent for one of the richest championships.

Discovery has also invested in TV production and is seeking acquisitions to add to All3Media, the UK-based producer it bought last year in partnership with cable company Liberty Global, which has Malone as its chairman.

Zaslav said Discovery would continue to look at smaller companies in Europe and Latin America to add to its production portfolio.

"If we tell more stories and serve up more compelling characters we can gain more meaningful share, and that will make for another level of growth," Zaslav said.

- Bloomberg